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Businesseses Downsizing, Companies Failing. When Will the Cannabis “Bloodbath” End?

Mon, 02/10/2020

In case you missed it, a large shakeup is taking place in the cannabis industry, as markets contract and a number of businesses downsize or fail. Experts say it’s about to get much worse. But there’s good news. There could be calm — and even a rally — after the storm.

“In the next two quarters, watch for eight or nine major companies that really have a lot of investor capital tied up in them, go under, and really watch the ripple effects through the industry,” Rob Hunt, founder of Linnaea Holdings, told Marijuana Businesses Daily.

“But then it’s going to start coming back. Because the compounded annual growth rate in the industry (is) still tracking exactly as we expected, as far as dollars across the counter. We’re not seeing people consume less.”

When the smoke will clear, nobody knows. But BDS Analytics has predicted that legal marijuana sales will overtake the black market by 2024.

There could be reprieves even sooner. Analysts predict that more cities and counties will vote to legalize commercial cannabis this year and there’s still the possibility of tax reform coming out of the legislature.

There is still room for caution, according to cannabis activist and Harborside CEO Steve DeAngelo.

“If nothing changes,” he said, “two years from now you’re going to see an awful lot of blood on the tracks.”